Civil service pension mutual 'couldn't cope', says NAO
Civil service pensions mutual MyCSP "did not cope" with the workload after it took over from Capita in 2014, the National Audit Office has said.
Pensions scheme members reported "hardship, distress and inconvenience" caused by the late payment of pensions, the NAO said.
MyCSP said its performance was now back to a "steady state".
The PCS union said the mutualisation had been "a textbook case in how not to reform public services".
MyCSP, a joint venture between government and private sector firm Equiniti, took over civil service pensions administration from Capita in September 2014.
In a report on Thursday Amyas Morse, head of the National Audit Office said the mutual "did not cope with the workload and a large backlog of work built up".
"Some people were paid late and members struggled to contact MyCSP," he added.
Due to a lack of staff, a backlog of work grew, peaking at 22,000 urgent cases in January 2015, and many thousands of calls went unanswered.
Between September 2014 and March 2015, MyCSP failed to answer 99,408 calls, the NAO said.
The mutual was unable to prioritise urgent cases once a backlog had built up because of the way its system ran, NAO added.
In January 2015 the Cabinet Office told the mutual to develop a plan to tackle the backlog.
By September 2015 MyCSP had managed to re-establish previous performance levels and was not hit with any financial penalties, the NAO added.
MyCSP said: "We recognise the findings of the National Audit Office report published today.
"It has been well documented that a number of factors led to the reduction in service levels, including a communication to 1.1 million members which resulted in significantly increased call volumes and a corresponding impact on 'business as usual' workload."
It added that it had recruited new staff, increased call centre opening times, and started in-house training.
"Call handling levels have been back to normal for the past six months, with a corresponding reduction in member complaints, significantly down from their peak at the time of the service challenges," it said.
"Service to members remains our utmost priority and we will continue to work with... the Cabinet Office and employers to deliver towards that aim," MyCSP added.
The PCS union said the NAO report had "exposed the failings of the government's only mutual venture in a damning verdict on the administration of civil service pensions".
The new pension administration IT system, Compendia, was not fully ready when MyCSP took on the extra work, PCS said.
Compendia was developed by Equiniti, which took over a controlling stake in the mutual in 2014, PCS added.
PCS general secretary Mark Serwotka said: "The mutualisation of MyCSP has from the start been a textbook case in how not to reform public services."